Schlumberger Limited (NYSE:SLB) Q3 2019 Earnings Conference Call - Final Transcript

Oct 18, 2019 • 08:30 am ET


Schlumberger Limited (NYSE:SLB) Q3 2019 Earnings Conference Call - Final Transcript


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Ladies and gentlemen, thank you for standing by. Welcome to the Schlumberger Earnings Conference Call. [Operator Instructions]

I would now like to turn the conference over to Simon Farrant, Vice President of Investor Relations. Please go ahead.

Simon Farrant

Good morning, good afternoon, good evening, and welcome to the Schlumberger Limited third quarter 2019 earnings call. Today's call is being hosted from New York City, following the Schlumberger Limited Board meeting held here this week. Joining us on the call are Olivier Le Peuch, Chief Executive Officer; and Simon Ayat, Chief Financial Officer. Our earnings call will take a slightly different format. We've shortened our prepared remarks in order to leave more time for your questions. Olivier will start the call with his perspective on the quarter. Afterwards, Simon Ayat will give more details on the financial results. Then we'll open up for your questions.

As always, before we have again I'd like to remind the participants that some of the statements we'll be making today are forward-looking. These matters involve risks and uncertainties that could cause our results to differ materially from those projected in these statements. I therefore refer you to our latest 10-K filing and other SEC filings.

Our comments today may also include non-GAAP financial measures. Additional details and reconciliation to the most directly comparable GAAP financial measures can be found in our third quarter press release, which is on our website.

Now I'll turn the call over to Olivier.

Olivier Le Peuch

Thank you, Simon. Ladies and gentlemen, good morning. I would like to add to the earning release, my comments on the quarter before covering some of the points critical to our business.

First of all, as we are seeing the release this morning, we have taken enough of the non-cash, $12.7 billion charge. This charge reflects the impact that market conditions have had on the valuation of our goodwill, intangibles and fixed assets. None of this changes our ability to generate strong cash flow, as this quarter as once again demonstrated. Giving us flexibility to navigate the more uncertain market landscape.

Simon Ayat will discuss the charge during his remarks. I will now comment on our Q3 operational performance followed by the short-term outlook and conclude with a brief update on our strategy implementation. Our first quarter results were very positive in a mixed environment, driven by strong international performance. The international margins improve and we deliver more than $1 billion in free cash flow.

Additionally, we recorded the best ever, the best ever quarterly safety performance for the Company, an outstanding achievement setting new safety performance benchmark for our industry. All in all, based on the quarter aligned with our performance vision and our focus on returns. I'm very pleased with the results and I'm proud of the Schlumberger team that delivered this performance.

The financial results this quarter were driven by the strength of activity in the key international market. Similar activity picked in Russia, the CIS and the North Sea. The Far East and Asia regions